Essay on Globilization

It has been claimed that globalisation has the potential to reduce inequalities in the world. Conversely, it has been argued that globalisation is leading to deeper and broader social inequalities. Evaluate these claims, using at least two topics covered in the course.

This essay will lay out the issues about globalisation in regards to social inequalities and the potential for the reduction of inequalities. It will look at the colonial conquests with the power and control these brought to primitive countries and see the way the economic system was set up ensuring Europe was gaining wealth from the cheap labour and other resources of less developed nations. We will also look at the way the modern economic system still holds this power flow from the Transnational Corporations (TNC’s) and that these corporations still help to boost their host Nations. We will see how the economists claim to help people in any country to which they can bring the Global Markets. During this it will be explained how this power and control is keeping people in situations that assist profits for the “rich club” and to show that even though new technology and world systems could be created for better opportunities and equality for workers, instead these mechanisms are used primarily to boost the networks of the powerful and to maintain the status quo for the capitalist financial interests.
The European colonisation of undeveloped countries has been a substantial historical process. This has boosted the rise of capitalism and has been the base of Transnational Corporations. Through the trade routes they conquered, developed and protected, these countries were able to exploit the primitive populations of the new found colonies (D J Boudreaux, 2008 pp 9-10). The discovery of the gold in the New World (America) allowed Europe to have the financial boost that instigated the renaissance. Europe was getting richer and more cultured while the new colonies were left in a state of poverty and exploitation. In modernity we see the rise of companies with factories and the fight between unions and corporations in developed countries and new concepts of workers’ rights against production costs and profit margins. The Fordism era must also be taken into consideration with the rise of consumerism to make more customers for mass produced products (Robin Cohen and Paul Kennedy 2007 p87). It is no surprise that these foundations of globalisation lead us to an indulgent market that still exploits the under developed nations. These combine technology and cheap labour for mass production and they evolved into post-Fordism with relations to capitalists gaining more control through casual and temporary work with little if any benefits for workers (Cohen, Kennedy (2007 p101).
The World Bank maintains a lot of financial control through ongoing debt. It has the vantage point of the bird’s eye view of the whole global economic situation. It is no doubt they know how things work for the maintenance of the capitalist profit plans and how they can go about them. John Williamson from the World Bank while talking to a science convention in Sri Lanka argued the benefits and the problems of globalisation and how the primary globalisation was set up for financial reasons. Trade through global networks is the driving force of international links. He argued that there was benefit for countries with low skilled labour to increase the living standards in their poor nations through new technologies if they produce items cheaply for the world markets. But he argues that this then lowers the standards of low skilled labour in developed nations. He also discussed that the poor nations should focus on education to compete with other nations who provide low skilled labour.
He also stated that, “there is a good analytical reason for arguing that trade will tend to make the rich richer and the poor poorer” (Williamson, 1998).
The book Small Countries in a Global Economy points out that small countries with specialised production such as Switzerland with watches, Ghana with cocoa, Nicaragua with coffee and Kuwait with oil have found the way to do well on the world stage of markets. They can even control the prices of such products through their level of production (D Salvatore, M Svetlicic and J P Damijan 2001 pp 71-72). They also show how globalization has been good for the smaller nations gaining sovereignty from larger empires like the Soviet Union. After there independence some get caught up in the importance of sovereignty verses economy and the fact they must comply with many internationalist rules and regulations along with competitions with other countries for low skilled labour and other industry making them servants to Multinational Corporations (Salvatore, Svetlicic, Damijan 2001, pp 25-27). Hence nations are joining with other countries in Conglomerates (like the European Union) to get the benefits of free trading deals, open borders, and combined trading might against other conglomerates such as the USA (Salvatore, Svetlicic, Damijan 2001, pp 8-15). This means that although there has been a boom in New Nation States since the break of World War II there has also been the hard fact that these new nations need the trading power of the greater nations close to them to compete and survive in the global market. The empires were broken down after WWII when they became too restrictive for capitalism, and American-dominated global hegemony started to take the place of European colonialism. These new states can thank globalization for their new found independence from Imperial rule. This in turn shows that globalization has helped bring some level of self determination to these countries. The idea of the New World Order that was being developed in 1989 was going to bring peace because of free trade markets through Globalization and it was a big ideal for those pushing the United Nations position and the larger number of countries involved in it (Salvatore, Svetlicic, Damijan 2001, p 3).
One positive aspect of globalisation has been the uniting of groups for workers rights around the world. The workers networks have been fighting government oppression, companies who exploit workers and environment impacted issues. It could be argued sadly that they have little real effect on the quality of life for the world’s poor and low paid workers. Unions have been in an uphill battle that could be seen as them losing (Rodrik 1997 p75). They make some inroads and then the corporations along with Governments find ways to reduce their effectiveness. In the US the workers asked for the human side to be taken into consideration, and that the cost of labour should not be part of the financial equations as labour is more than profits; it is people (Rodrik 1997 p76). In countries that succeed in gaining higher wages, there is a consequence of higher unemployment (Rodrik 1997 p11). Their factory closes down because the TNC moves their business to a factory that still exploits its workers. They undercut the factory with better conditions and higher production costs as a result (Rodrik 1997 pp 1-2). The struggle to keep profits coming in are reflected by Rodrik by such sayings as “low wage competition” and “race to the bottom”, representing the desire to pay as little as possible for the use of labour (Rodrik 1997 p3).
Rodrik goes on later to explain how the workers have three major issues, firstly that they pay a larger share now in work conditions and benefits, secondly that they have an insecurity in regards to pay rates and hours worked because of higher labour productivity and thirdly their bargaining power is eroded in regards to settling the terms of employment by the rising unemployment (Rodrik 1997 pp 4-5). With little hope of promotion, no surplus income (barely enough to live with) and the risk of not being able to find another job because the number of unemployed is putting pressure on available jobs to the point that any mistake could see them replaced. Then when changes happen that reduce the conditions of employment there is no way to protest without jeopardising jobs. The modern low skilled labour has been manipulated into becoming a slave type cast by corporations who have too many binding circumstances hanging over the employee’s heads. On top of this they are kept powerless by their bills and general high cost of living in consumer societies. Debt grows and envelopes their lives, leaving them chained to their jobs. This is in contrast to the middle to high income earners who have highly mobile opportunities with their skills and educations to be able to negotiate and to move on if they are not satisfied.
Much of this is reflected by the companies themselves with different ways they look at work ethics on a global front. In some cases were companies will look after their home countries employees who will be higher skilled and harder to replace, but they outsource some functions (like low or unskilled labour) to other countries in order to exercise the “exit” option instead of the “voice’ option. This allows them to be disengaged from local communities, removing themselves from responsibility for the people around the outsourced facilities (Rodrik 1997 pp70-71). Products are now easier to move through modern communications and transport technologies, easier border controls, and inviting governments. Local employment options are locked into globalisation whether they like it or not. Only drastic government restrictions can alter this formula (Rodrik 1997 pp 71-72).
Bolton argues that the current climate of anti nationalism is fuelled and supported by the powerful TNCs and the Governments that need and support them. They use the term “racist” as a way to subdue any form of national pride and anyone who wants to protect their national culture from mass immigration that forces the lowering of wages and homogenises the cultures into a potential world culture. This would then break down barriers of trade as the lack of national pride means that there is no longer a resistance to globalisation and multiculturalism. He also explains that Marx supported the free trade agenda by the capitalists because it also suited his own desire to see the nation-state destroyed (Bolton 2009). These prejudices toward Patriotic/Nationalists politics lead to an international move to put down nationalism and remove it from having any voice. This political favouritism toward internationalist driven politics in itself shows an example that globalisation creates an unequal environment for political expression.
The financial driven experts have their own view of this. Boudreaux claims that historically it is nationalist based economic countries which cause financial depressions (D J Boudreaux, 2008 p10) and that the current countries which suffer the most poverty are those who have cut themselves off from the Global Market, such as North Korea and Niger (Boudreaux, 2008 p34). He also shows that the lower fifth of a country’s income earners go up or down as a result of the country’s economic percentage. So that when a country is doing well at the market trade their people’s wages will go up right down to the lowest paid worker (Boudreaux, 2008 p30). He rubbishes the argument that wages drop in the high consumer countries as a result of cheap labour in poorer nations. He uses statistics from the United States showing that workers are compensated based on their productivity (Boudreaux, 2008 p60). If he is to be believed then all the countries that are poor are that way because their Governments shut them off from the world economy and that everyone has a better life as a result of Globalisation.
The TNCs with their economist apologists will argue that they are improving the world with globalised capitalism and free trade. Their rationale seems to be that the accumulation of wealth by a few will allow a drift of money to the bottom of the food chain to help even the poorest people. Yet even this is in itself showing an unequal spread of wealth. The %5 higher wages across the country will be good for someone on high wages, but show very little extra for someone on bare minimum wages (Boudreaux, 2008 p30). They also argue that technology will help poor countries. This is true if it is applied to assist people. The evidence is often contrary to this with the technology going to the hands of those who will exploit it for their own gain.
On the surface with global pop culture and the high level of entertainment for the developed and developing countries, it is easy to over look the huge inequalities of the underdeveloped nations compared to the developed. It is also more evident of the growing gap between rich and poor in western countries. But modern lifestyles have become the masters of distractions. While the status quo is maintained with the wealthy expanding their power and the debt bound Governments making policies to support capitalist progress, the workers and the poor in both third world and developed world are not able to have a high standard of life (Cohen, Kennedy 2007 pp 114-116 and 202-203). With the modern technologies created to make human life better, easier, healthier, those who are suffering from poverty, disease, starvation and a list of other problems are mostly ignored because they are born out of sight from the “rich club” nations and the wealthy people of their own nations. In the end it comes back to the same TNCs exploiting the third world countries for profit over-looking the possibilities for equalising people and instead keeping the situation as a financial, not a human advancement.

Bibliography
• Robin Cohen and Paul Kennedy (2007) Global Sociology. 2nd Ed. Palgrave MacMillan.

• D Salvatore, M Svetlicic and J P Damijan (2001) Small Countries in a Global Economy. Palgrave, New York.
• D J Boudreaux, (2008), Globalization, Greenwood Press, London
• D Rodrik (1997), has Globalisation gone too far? Institute for International Economic, Washington
• John Williamson, (1998) Globalization: The Concept, Causes, and Consequences. http://www.iie.com/publications/papers/paper.cfm?ResearchID=330
• K Bolton (2009), Multiculturalism as a Process of Globalisation, Ab Aeterno No. 1, Journal of the Academy of Social and Political Research, Athens, pp. 25-31